Real Wages Fell for Nearly 40% of U.S. Workers as Inflation Beat Pay for 4 Months
Updated
Updated · Business Insider · Aug 20
Real Wages Fell for Nearly 40% of U.S. Workers as Inflation Beat Pay for 4 Months
3 articles · Updated · Business Insider · Aug 20
Summary
Nearly 40% of U.S. workers saw real wages fall between December 2020 and 2024, according to ADP-linked research, leaving many households with less purchasing power even after inflation cooled.
Four straight months of inflation outpacing wage growth have reinforced that squeeze, helping keep University of Michigan consumer sentiment worse than during the COVID period despite low unemployment and continued spending.
Almost three-quarters of consumers in August said they expect prices to rise faster than income over the next year, with higher energy costs seen as a key risk to broader household budgets.
Bonuses did little to offset the losses, researchers found, and economists said middle- and lower-income households remain most exposed because price levels are still elevated and many workers never regained what the 2022 inflation surge erased.